New research documenting consumer pessimism over the future of the NHS highlights major opportunities for insurers, writes Chris Jones.
This represents a major challenge to the insurance industry, which must now design new products that do exactly that. The key is to recognise consumers want affordable top-up cover that enables them to operate within the NHS system, co-funding their care in order to ensure a better overall experience, rather than expensive insurance that enables them to bypass the NHS altogether.
These products will not look like fully fledged private medical insurance, which costs too much for a mass-market audience (just 16% of the UK population is now covered by PMI, mostly through their employers). But they will go beyond existing cash plans that pay small sums to policyholders to cover their costs during periods of hospital treatment.
An example is FirstAssist’s Priority Diagnostics Plan, which enables policyholders to see a specialist medical consultant straight away if they are concerned about a health problem.
Having received a much speedier diagnosis than would otherwise have been possible – addressing the concern consumers have about waiting times for consultant appointments – they then return to the NHS for treatment (few consumers have concerns about the quality of care in the state system).
There will be no shortage of opportunities to offer similar products. One possibility is a policy that covers only non-urgent procedures such as joint replacements, where consumers believe increased rationing of NHS care will mean they have to wait longer for such treatments, even though doing so may curtail their quality of life.
After-care services should also be a priority area. Many people fear the NHS will no longer be able to provide them with the sort of intensive after-care necessary to get them back on their feet as quickly as possible following a procedure or treatment. A policy providing top-up care in these circumstances is an obvious solution.
One crucial feature of these products will be a recognition that consumers’ biggest worry about their health is often about the impact on their lives rather than specific conditions.
This is why the NHS’s difficulties worry so many consumers. They realise the practical effect of the service’s retreat is likely to be that this impact is prolonged. They may be unable to work for longer periods, putting the family finances under strain. They may also be unable to enjoy their lives.
It is the top-up products that address those concerns most directly that will succeed: consumers want cover that enables them to get their lives back to normal as quickly as is possible.
Who will buy?
Value will be important too. Consumers’ disposable incomes are under pressure and savings have been depleted. Few are able to self-fund private healthcare, even if they return to the NHS for the care itself. Nor are they able to pay expensive insurance premiums.
